Inflation concerns and Federal Reserve policies have influenced the NASDAQ’s performance. The January CPI report showed a 0.5% monthly increase, raising concerns about potential rate hikes. Fed Chair Jerome Powell emphasized the need to maintain restrictive monetary policy until inflation stabilizes closer to the 2% target.
NASDAQ is breaking above 22000 again. This level represents a possible third long-term Elliott upside wave top but we need to see a confirmed break below 20600 to confirm that. Any significant break above 22000 and 22400 long-term channel high will lead to a prolonged third wave. Learn to Trade Stocks profitably.
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The NASDAQ weekly chart below reveals a test of the uptrend channel resistance and a rising wedge 22180. At this point, sell positions have a greater probability of success. If we get a confirmed break below 22000 again, we should see an acceleration of a reversal lower. The first target after a 22000-level breakout will lead to a test of 20500. If we see a confirmed break above 22500 then NASDAQ will have a prolonged bullish momentum and you should reverse to long trade entries.
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As the famous trader says…
“The biggest mistake investors make is to believe that what happened in the recent past is likely to persist.”
Ray Dalio
How to trade this?
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It is a fact that a strong upside resistance for Q1 2025 is 22200 and If we get a confirmation of a breakout and a sustained extension below this level we could see still a strong upside continuation in the long-term third-wave. You can take the short trade here with a stop loss above 22400 to try a contrarian short trade before going long in the case of a breakout. You can trade with put options as well. For inquiries about account management or copy trading please write to [email protected] or contact me on WhatsApp or Live chat.
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